Can I Afford a $1.5M House?

Let’s cut through the noise, shall we? Buying a $1.5 million home is a massive goal, and the first thing we need to tackle is the monthly repayment. Assuming current lending rates hold steady around 6.2% over a 30-year term, servicing a $1.5 million loan means you’re looking at repayments of roughly $9,300 per month. That’s the principal and interest payment, and remember, that doesn't even include rates, council fees, or insurance. To put this into perspective, this figure represents a significant chunk of your take-home pay. Before you get too excited, it’s crucial to understand your actual budget. Use our dedicated affordability checker to get a realistic picture tailored to your finances.

The deposit is your financial starting line, and the amount you save drastically affects your upfront costs. For a $1.5 million home, a 20% deposit means you need $300,000, which is fantastic because it saves you the dreaded Lender's Mortgage Insurance (LMI). If you only manage a 10% deposit, you’ll need $150,000, but you’ll also have to pay LMI, which is essentially an expensive guarantee for the bank. If you are scraping by with just a 5% deposit ($75,000), the LMI costs will be significant and add thousands to your upfront expenses. To help you plan your savings journey, read up on how much deposit you truly need. We recommend using our LMI calculator to see exactly how much this extra cost will eat into your budget.

Mortgage lenders generally want to see that your repayments represent no more than 25% to 30% of your gross income. Given that a $1.5 million loan repayment is around $9,300 a month, if we assume a comfortable 30% income ratio, you would need an annual gross salary of approximately $360,000. This gives you a solid benchmark to aim for! If your salary is lower, you might be able to afford a smaller home or need a longer loan term. Knowing this number is the first step to financial planning. We suggest running through our mortgage calculator several times with different salary inputs to understand your true borrowing capacity.

A $1.5 million price point is common in desirable Sydney or Melbourne suburbs, but it's also achievable in certain growth areas. Understanding market trends is key; local median prices can fluctuate wildly. If you are a first-time buyer, do not forget to look into concessions! These grants and schemes can dramatically reduce your upfront costs. For 2026, always check the latest updates on first-home buyer grants and local government incentives, as these change regularly. Remember that while these concessions are amazing, they are often tied to specific residency requirements, so read the fine print carefully before making any assumptions about affordability.